It's not really even a ripping station. It's a system for watching your DVDs and BDs in a really convenient manner.

Disclaimer: I work in the industry that Kaleidescape sells to, I work with a couple of people that used to work there, and I know Michael Malcom. And we've got one of their systems set up in our offices.

Your analysis is correct in that the system copies DVDs, BDs and CDs to a hard disk array that, in our case, is in a rack in the equipment room (it's got fans that are loud along with with the spinning drives) and plays them via a player with an HDMI output in a different part of the building. The units are connected via the same Ethernet network used for data. If you know the background, you know that the founders of the company approached the DVD CCA and did, indeed, get a license. The DVD CCA changed their mind about the license later. They are the ass clowns, in case there was any doubt.

It's not just the playback that's useful, the system allows you to set favorite scenes and jump right to them. We need to demonstrate various audio and video capabilities of the equipment we manufacture. Being able to jump from movie to movie, scene to scene with a push of a button - or to write a simple script to run a full demonstration - without having to wait for each disk to spin up, display the FBI warning, etc. is the reason we have the unit.

We've also bought every single title that's on it. When you are playing a scene from a movie to the people who were involved in making it, it would be really embarrassing to explain that you ripped it from a rental. Not that people that pay the amount that one of these systems cost are the kind of people who flinch at paying for a movie anyway.

Do you want to know who owns systems like this? There's one big group I know of - next time you see a movie, watch the names in big type in the credits. When their home systems stop working, I hope they direct their ire at the DVD CCA, because those are the folks that broke their toys.

I worked at RealNetworks for a while, on a doomed project called RealDVD. There were going to be two versions of RealDVD: a software-only version you could run on your laptop or whatever, and a software stack to be licensed to consumer electronics companies.

The reason RealNetworks thought there was a chance they could do this was: Kaleidescape. Kaleidescape made such a product, got sued, and won. There was a clear legal precedent.

For the next section, you are getting this third- or fourth-hand. I wasn't there for this. This is what I remember of how it was explained to me. I apologize in advance if anything here is incorrect.

What did Kaleidescape do? They signed up as a licensed and authorized customer of the official CSS unscrambling code, and built a licensed DVD player. Theirs just happened to have a big box full of hard drives that cached the disc images. (They had a quiet and stylish head-end unit for your living room, and some sort of big noisy box or boxes for the hard drives, which you would put in your basement or whatever.)

Once it was clear what Kaleidescape was up to, they got hit with a lawsuit for violation of contract. They were sued by the authority in charge of CSS, the CCA. In court, Kaleidescape pointed out that they had obeyed the contract to the letter: the contract didn't say anything about not copying the discs, or about the disc needing to be in the drive at the time of playback. (After they signed the contract, they received the technical specs, and the technical documents said "you can't copy the discs and the disc must be in the drive at the time of playback". Kaleidescape argued in court that this cannot be legally held to be part of the contract. The judge agreed.) Kaleidescape prevailed in court.

So, RealNetworks looked at this and said: clear legal precedent that this is legal to do. We had better do everything exactly the way Kaleidescape did it. So we ripped a bit-exact copy of each DVD, making no attempt to re-encode in MPEG4 or anything like that. We encrypted each disc image. We even made the UI pop up messages saying things like "remember, you can only do this if you own the disc". (It goes without saying, but RealNetworks also licensed CSS decryption, with all the hassles [slashdot.org] that entailed.)

Now, while Kaleidescape charged US $30,000 for their first model, and only US $10,000 for their "inexpensive" model, RealNetworks was going for a $300 price point on the consumer electronics product, and a $50 price point on the Windows software. No doubt this raised the level of concern from the MPAA; instead of a few rich people buying Kaleidescape units, the common people could buy RealDVD en masse.

The Windows software product shipped before we had the consumer electronics version ready to manufacture. It was sold by download, with an introductory price of $30.

The discussion here on Slashdot was nearly unanimous: hah, what morons those RealNetworks guys must be. Why would anyone buy a product that encrypts DVD images and is useless as a ripper, when we can just get Handbrake and do whatever we want?

Despite the/. scorn, the general consumer reaction to RealDVD was very positive, and sales were brisk.

Sales lasted about a week.

The MPAA picked a venue to sue RealNetworks, and asked the judge for an emergency injunction to shut down all sales of RealDVD. The judge (the same judge who ruled on the Napster case) granted the injunction.

This time, it wasn't a breach-of-contract suit. The DMCA gave them a big hammer and they used it. The judge agreed: DMCA says no copying, you guys are copying, you lose. There was more to it, but it was the DMCA that really did in RealDVD.

I wanted a RealDVD player in my living room. I believed in the product. It was not to be.

So when I saw this news, I figured the MPAA had used the DMCA to shut down Kaleidescape. Imagine my surprise when I found that it wa